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CAN THE GUARDIAN SURVIVE?

From the archive: newspapers are in crisis—yet they have greater reach than ever before. And nowhere is this truer than at the Guardian, the paper that revealed the Murdoch phone-hacking scandal. Tim de Lisle spoke to its editor

From INTELLIGENT LIFE magazine, July/August 2012

IT WAS A bright warm day in March, and one of the world’s leading newspapers was doing something radical: meeting its readers. The Guardian was holding the first festival in its 191-year history, billed as the Guardian Open Weekend. It opened the doors of its offices, at the King’s Place arts centre behind King’s Cross station in London, and offered passes for £30 or £40 a day or £60 for the weekend (one child free with every adult). Around 5,000 readers poured in. Among them was a Baptist minister in his mid-80s who had taken the paper, religiously, for 66 years.

The speakers included painters, politicians, physicists, rock stars, novelists, explorers, actors, footballers and philosophers. There were 188 events, and still the queues were long. You could take a boat trip on the canal, commission a T-shirt from a graffiti artist, eat mackerel and chips “curated” by a local chef, or browse second-hand books on a barge. You could observe the Guardian reader, and see how this semi-mythical figure now comes in two broad types—the over-60s, in linen jackets or sensible cardies, looking like retired teachers or psychotherapists, and the under-35s, in denim or leather, harder to pin a profession on. You could see the Guardian’s editor-in-chief, Alan Rusbridger, chatting to readers, tall and mop-haired with a satchel over his shoulder, simultaneously boyish and avuncular. You could listen to folk bands playing and poets reading from their work, and watch a blank white wall slowly turn into a giant mural, a Bayeux tapestry of vivid vignettes from the weekend captured by a team of illustrators. Among them was a cuddly, felt-tipped version of the artist Grayson Perry, in his transvestite mode, with a speech bubble. “Bite the hand that feeds,” it said, “but not too hard.”

The atmosphere was stimulating and fiercely polite. The Guardian is easy to mock for its sandal-wearing earnestness, its champagne socialism and congenital weakness for typos, but its readers en masse seemed like the kind any editor would be glad to have: curious, questioning, quick to laugh. Seeing the rapport between them and their paper, feeling its pull for the powerful and the talented, enjoying this brand-new festival that felt as if it had been going for years, you could easily have assumed that everything in the Guardian was rosy.

IN MANY WAYS, it is. With its journalism, the Guardian has been having an astonishing run. For 20 years or more, ever since a bold reinvention led by Rusbridger’s predecessor Peter Preston in 1988, it has been the most stylish paper in the hyper-competitive British quality pack, the wittiest and best-designed, the strongest for features, the one most likely to reflect modern life. But it ruled only at what journalists call the soft end. In the 1970s, the age of Woodward and Bernstein, the Guardian’s best-remembered story was an April fool from 1977, which dreamt up the Pacific nation of San Serriffe – beautifully done but disclosing nothing more than its own sardonic wit. In the 1990s, the Guardian began to land some scoops, notably the scandals that brought down two Tory MPs, Jonathan Aitken and Neil Hamilton. But it still wasn’t known for big investigations, the kind of stories that demand courage, persistence and resources. This is where its culture has changed. It ran a sustained investigation into illicit payments by the arms giant BAE—first alleged in 2003, finally admitted in 2010, and now the subject of nine-figure compensation settlements. It did well with the Wikileaks diplomatic cables, and the English riots of 2011 and their causes.

Above all, it has led the way in the News International phone-hacking scandal, a farrago of power, corruption and lies, exposed by Nick Davies and other Guardian reporters. For two years, their investigation was lonely and scoffed at. A police chief urged Rusbridger to drop it; the mayor of London, Boris Johnson, who presides over the Metropolitan Police, called it “codswallop”. Then, last July, came the Guardian’s disclosure that the targets included the murdered teenager Milly Dowler. The story erupted across all the media. It has now led to the closure of the News of the World, the humbling of Rupert Murdoch, the fall of his son James, the arrest of his favourite Rebekah Brooks, multiple resignations by senior policemen and media executives, at least 50 more arrests, and six official investigations—three criminal ones, employing 150 police officers; one by a House of Commons select committee, one by the communications regulator Ofcom, and, most theatrically, the Leveson inquiry into the regulation of the media, which has spent months shining a fitful light on the mucky machinations of power. By the end of May, when it emerged that the Conservative-led coalition had allowed a former Murdoch editor to work at 10 Downing Street without the normal security vetting, the trail of dirt led all the way to David Cameron’s desk.

The hacking saga has shown journalism at its worst, invading the privacy of a murdered schoolgirl and her family, but also at its best, exposing a web of illegal activity that the police had missed, and speaking truth to power at a time when Rebekah Brooks, for one, was busy kissing it on both cheeks.

The Guardian’s reporting has not been faultless—it had to retract the claim that News of the World reporters had deleted voicemails on Milly Dowler’s phone, which caused an extra layer of public revulsion. But this will still go down as one of the great investigations. As Watergate is to the Washington Post, and thalidomide to the Sunday Times, so phone-hacking will surely be to the Guardian: a defining moment in its history. In March, Rusbridger went to Harvard to receive the Goldsmith Career Award from the Joan Shorenstein Centre, one of the highest honours in American journalism. He was the first non-American to win it. “V happy to be in harvard for a career award,” he told his 70,000 Twitter followers. “Like reading nice obit without going to trouble of dying.”

This triumph of old-school reporting has been accompanied by spectacular success in new media. The Guardian has never been a big-selling newspaper: among the 11 national dailies in Britain, it lies 10th, with only the Independent behind it. But on the internet, the Guardian lies second among British newspaper sites (behind the Mail, which cheerfully chases hits by aiming lower than its print sister) and in the top five in the world, rubbing shoulders with the New York Times. Where many newspapers treated the web with suspicion, the Guardian dived in, starting early (1995), experimenting widely, pioneering live-blogging, embracing citizen journalism, mastering slideshows and timelines and interactive graphics. By March 2012 it was putting up 400 pieces of content every 24 hours. Its network of sites had a daily average of 4m browsers, as many as the sites for Britain’s bestselling newspaper (the Sun) and its bestselling broadsheet (the Telegraph) put together. The Guardian’s total traffic, around 67m unique browsers a month, was still rising by 60-70% a year.

A third of those readers are in America, which is an extraordinary achievement for a left-leaning British newspaper with its roots in Manchester. The urge to crack America is a common yearning in British public life, affecting not just rock bands and TV personalities but supermarkets (Tesco, which hasn’t succeeded) and prime ministers (Tony Blair, who has). In the news media, only three British institutions apart from the Mail have made a big impact in America: the BBC, which was already world-famous before it launched BBC America in 1998; The Economist (mothership of this magazine), whose abiding belief in the free market chimes with American values; and now the Guardian, which had no such head start. If, 15 years ago, anyone in British newspapers had predicted that the Guardian would soon find an audience of 20m in America, they would have been laughed out of the pub.

In terms of reach and impact, the Guardian is doing better than ever before. But its success may contain the seeds of its demise. Its print circulation is tumbling. In October 2005, boosted by a change to the medium-sized Berliner format, the average daily circulation was 403,297. By March 2012 it was down to 217,190. Those figures are not quite like-for-like, as the Guardian has sworn off the Viagra of giveaway copies and overseas sales (which tend to be counted less rigorously); but they are still bleak. Saturday sales remain sturdy, at 377,000, but, on a typical weekday, only 178,000 people buy the Guardian, while millions graze on it for nothing on their screens. In the financial year 2009-10, the national newspapers division of Guardian Media Group—which also includes the Observer, Britain’s oldest Sunday paper—lost £37m. The following year, it managed to cut costs by £26m, and still ended up losing £38m. In May, Rusbridger told me he was expecting a similar loss for 2011-12. So, for three years running, the Guardian has been losing £100,000 a day. This is not boom or bust, but both at once: the best of times, and the worst of times.

At the Open Weekend, one event looked at whether journalism was a second-rate form of writing. In the audience of 50 or so was the white-haired figure of Nick Davies, taking a breather from his investigative duties. When the conversation turned to long-form journalism, he spoke up, sounding exasperated. “In 20 years’ time,” he said, “there won’t be any newspapers left to do this. All these millions of hits won’t pay our salaries. The internet is killing journalism.”

IN FLEET STREET, not many editors last long. Those who do stick around tend to come in one of five types: the smooth, the calm, the owlish, the dynamic and the apoplectic. David English of the Daily Mail was smooth; William Rees-Mogg of the Times was owlish; Harold Evans of the Sunday Times was dynamic; Kelvin Mackenzie of the Sun was apoplectic. Alan Rusbridger is calm. “We’ve all been hit by a tidal wave,” he observes. But his tone is that of a man telling you that he has run into a spot of drizzle.

He is in his office, which rather sums up the two sides of the Guardian’s personality. It is amiably cluttered, with books spilling out of shelves and sitting in piles on the floor; but also big and modern, with floor-to-ceiling windows,sparkling canal views and pod-shaped armchairs. It’s as if an Oxbridge don had stumbled into a yuppie loft.

His answers are apt to be as measured as his tone. When I say that the Guardian seems to be having a triumph and a crisis at the same time, he replies, “If we are, everybody is. Maybe the answer is that everybody is.” He gives a studious summary of the market. “If you divide it in old-fashioned terms, and maybe we shouldn’t, we’re in a market with four papers, and the other three [the Telegraph, Times and Independent] are all owned by billionaires—the Barclay brothers, Rupert Murdoch or [Alexander and Evgeny] Lebedev. The last two declared losses for the Times and the Sunday Times were £78m and £48m, from memory, so we’re doing much better than they are.” (When I check the figures, they turn out to be £88m and £45m—followed by £12m. Say what you like about Murdoch, he has got the losses going the right way.)

A sceptic could point out that the Guardian might as well be owned by a billionaire, given the losses it has been able to stomach. It is owned by the Scott Trust, set up in 1936 “to secure the financial and editorial independence of the Guardian in perpetuity”. The trust became a limited company in 2008, but remains trust-like, with all the shares held by the trustees. It also owns most of Auto Trader magazine, a cash cow which usually covers the Guardian’s losses. The idea that journalists like to believe, that the service they provide is more important than any profit it might make, is enshrined in the Scott Trust’s constitution. And Rusbridger says it makes a big difference to what they publish: “The fact that it was the Guardian that did the phone-hacking [story] directly flowed from being a trust.” But being a trust leads, inevitably, to mistrust: rivals depict the Guardian as a trustafarian, not having to make a living in the real world.

“The real world isn’t a real world,” Rusbridger argues, “because there is nobody in our market, except the Telegraph, who is making a profit. All the trust ownership does is to get us on a playing field with the big oligarchs, because otherwise we wouldn’t have a chance at all.” This is where he mentions the tidal wave. “It’s slightly different for all of us. In our case, the big thing that’s hit us is that £40m of classified advertising in print has gone, out of an overall turnover of about £230m. That’s a huge hole in the budget, which no business is going to absorb easily. Is that a sign of crisis? That is the crisis. And unlike the billionaires, we haven’t got endlessly deep pockets, so we don’t have limitless time to sort it out. On the other hand, we’ve got quite a lot of time, because we’ve got quite a lot of money, thanks to the extremely clever management of Scott Trust resources over the years.” At the last count, they had a war chest of £197m, but the chief executive, Andrew Miller, warned that it would only last “three to five years”.

The loss of the classifieds—to specialist websites—couldn’t be helped. The web giveth, and the web taketh away. What is more questionable is the Guardian’s insistence on keeping its website free. In 2010 its closest domestic rival, the Times, placed its content behind a paywall. In the first year, it claimed to have attracted 101,000 digital subscribers, although that included people downloading the paper on the iPad or Kindle, and it paid a heavy price in traffic: by November 2011, according to Searchmetrics, it was receiving only 256 links a week from social media, one for every 10,000 the Guardian was getting. In 2011 the New York Times, which has been through much the same trauma as the Guardian, moved to a porous paywall or freemium model – you can read a number of articles free (20 at first, now ten), but after that you need a subscription. Within a year, the New York Times had 454,000 digital subscribers. The Financial Times and The Economist also have a porous paywall.

The Guardian is not against all charges for digital reading. It asks a token sum for its iPhone edition (£4.99 a year), and a more realistic one for the iPad (£9.99 a month). But it is fiercely resistant to charging for its website—a position it shares with the Mail, the Telegraph, the Washington Post and many others. Some editors stay out of these choppy waters, saying the decisions are made by their commercial colleagues. Rusbridger goes the other way—not only is he happy to defend the Guardian’s stance, he has built a theory around it. He calls it “open journalism”, and in March, in an online Q&A session with readers, he defined it: “Open journalism is journalism which is fully knitted into the web of information that exists in the world today. It links to it; sifts and filters it; collaborates with it and generally uses the ability of anyone to publish and share material to give a better account of the world.”

He has become quite evangelical about it. Where did that come from? “Set aside how you’re going to pay for all this, and say ‘what’s the big story about, what’s happening to information, what is the big challenge for journalism?’ Any journalist who thinks we’re still living in the 19th-, 20th-century world in which a newsroom here can adequately cover the world around us in competition with what’s available on the open web – well, I think that’s very questionable. You can probably do it if you’re the FT or the Wall Street Journal and you’re selling time-critical financial information. For a general newspaper, forgive me if you’ve heard it before but the simplest way of explaining it is this. You’ve got Michael Billington, distinguished theatre critic, in the front row at the National Theatre. Are you saying you don’t need Michael Billington any more? No, he’s the Guardian voice, he is the expert. But what about the other 900 people in the theatre, don’t they have interesting things to say? Well obviously they do, and if we don’t do something with that social experience, somebody else will. And out of those 900 people, 30 will be very knowledgeable. So let’s say Michael Billington is as good as it gets, he’s 9 out of 10, but the experience of these other knowledgeable people is 6 out of 10, so the margin is 3 out of 10, that’s what you’re charging for. You either say ‘we’ll take that then, we’ll build a big wall round Michael Billington.’ Or you say, ‘actually, let’s get them on to our platform as well,’ and you’ve got 9 + 6. So what do you do? If you don’t do this, that’s bad for professional journalism, because you’re hedging against what other people can do. If you do do it, you have a much better account of what happens in a theatre, and you begin to think that it was quite odd to send one person on one night and think that was enough. It’s just obviously better. Then the question is how do you edit them, and find the people who know their Brecht from their musicals, and that’s probably partly software and partly old-fashioned editing.

“And the next question is, if it works for theatre does it work for other areas of journalism? I think it works for everything—investigative, foreign, science, environment. By building networks, you’re going with the flow of history, and your journalism is going to be more comprehensive and better. If you reduce it instantly to paywalls, you’re not tackling the bigger issue of what’s happening to journalism.”

Rusbridger makes it sound sensible, even stirring, and you can see how earnest roomfuls of Scott Trustees have been swept along. But you do wonder if it is the Guardian’s job to be all things to all theatregoers, and if it over-states the importance of online comments, which are seldom half as well written as the articles. Our sceptic might also note the first thing he said there: “set aside how you’re going to pay for all this.” How much can the flow of history do to swell the trickle of cash?

WHEN I SAW him, Rusbridger was excited about the Guardian’s new advertising campaign, a post-modern take on the tale of the Three Little Pigs and the Big Bad Wolf – who, in Guardianland, turns out to be the Big Misunderstood Wolf. On February 29th, the ad had its premiere on Channel 4: a lavish production, witty, meticulously detailed, four times the length of most commercials, reckoned to have cost millions. It was clearly made with YouTube in mind, and had reached a million people there by the end of May. It staunched the bleeding of the print readership, which rose by 0.56% month-on-month in March. But it aroused some disdain too.

Juan Señor is a leading expert on newspapers, a Spanish television reporter turned visiting fellow in news media at Oxford University and partner at Innovation Media Consulting, a firm which advises struggling papers. The remedies he prescribes—more explanation, stronger graphics, bolder features, full integration between print and web teams—look much like the medicine the Guardian has taken of its own accord. But when he saw the Three Little Pigs ad, he was unimpressed. “Open journalism?” he wrote in a tweet. “How about Profitable Journalism first. The Guardian lost £33m last year and counting. Muddled rhetoric, poor model to emulate.”

“We are very concerned,” Señor tells me on the phone from Los Angeles, “that everybody looks at the Guardian’s success in terms of volume of traffic. That is not a measure of success, because you might as well get into pornography. They’ve played the volume game all along. Open does not need to mean free, but the Guardian associates both things and is almost dogmatic about it, saying that if you put up paywalls you are somehow betraying the spirit of the web. There are Talibans on each side and that’s what is hurting the industry. Both extremes are wrong because they do not make money – the Times with its paywall and the Guardian being free. The truth is somewhere in the middle.” He points to the New York Times, and to Aftonbladet, a Swedish paper that has been charging online since 2003 and, he says, has just reached the point where digital brings in more money than print. “While I love the Guardian’s journalism at times, I just don’t think it’s sustainable. They’re announcing even more lay-offs, it’s a tragedy. And then they spend the money on the Three Little Pigs.”

The lay-offs have been two rounds of voluntary redundancies, one in 2010 which cut about 40 editorial jobs and 60 others from a total of 1,700, and one at the end of 2011, on which the Guardian has declined to put a figure (openness has its limits). Over the winter, the squeeze extended to the reader’s pocket, with a price hike from £1 per weekday to £1.20. It also showed up on the page. The separate daily sports section, launched in 2005, was reduced to Monday and Saturday only. The separate Media, Education and Society sections were folded into the main paper, the first time the knife had come close to the patient’s vital organs. But cuts, for an editor, are a chance to sculpt as well as to slash. Rusbridger—who took a pay cut himself in April, from £438,900 to £395,010—seized the opportunity to give newspapers another shove towards magazines, adding comment pieces and long profiles to the news pages, and planning some news packages a week ahead, influenced by another Swedish paper, Svenska Dagbladet. He calls it “a slight transformation”. On Valentine’s Day, the Guardian put something on the front page that may never have appeared there before as a main topic: love. The piece, an essay by the novelist Jeanette Winterson, was worth £1.20 by itself.

The feeling persists that the Guardian may be heading full steam towards an iceberg. At the Open Weekend, I spoke to one of the paper’s senior staff, and said that I was writing about the Guardian and whether it could survive. “If you find the answer,” he said with a rueful smile, “let us know.”

Rusbridger himself mixes optimism with wariness. Ask if the iPad will make a difference, with its ability to display something looking quite like the printed page, and he tells you it’s too early to say. “We had something like 600,000 total downloads when it was free.” How many of those are now paying their £9.99 a month? “I don’t think we’ve released the figures yet, but it’s a good take-up.” One industry rumour puts it at 28%, which would mean that almost as many people are using the iPad app as are buying the weekday paper.

He is more bullish about social media. “The thing that has changed fastest for us in the past three months”, he told me, “is Facebook. It has made a vast difference.” As part of its open policy, the Guardian got into bed with Facebook to try so-called frictionless sharing: if a reader who is signed into Facebook reads something on the Guardian site, the fact that they did so shows up in their Facebook newsfeed, with a link. This irritates some users, but gives the Guardian more young readers and a share of the revenue from any ads. “In the last week Facebook has overtaken Google for referrals. We’ve had 6m downloads of the Facebook app, and it has rocket-charged traffic to Guardian.co.uk. An audience of 18-to-25-year-olds who would never have read the Guardian in the past, are falling on Guardian content. Facebook are amazed by it, we’re suddenly on the Facebook radar in a big way.

“We’re in for about five years of twiddling the knobs on digital. There’ll be an HTML5 app, an Android app. Google are doing this quite clever thing, a way of building an instant app in 45 minutes rather than six months, a bit like Flipboard. You could have an app tomorrow, put ads on it and share the revenue with Google. It may be that the Guardian is entering a sweet spot where the two biggest players in new media are intensely interested in our content, because their users are doing so much with it. The giants of the new world are Google, Facebook, Amazon, Apple and Twitter. If you can get into a position where they are sufficiently interested in a little newspaper from London, there are glimmerings of light that tell you that this is beginning to be quite an exciting strategy.”

Meanwhile, the Guardian has to find ways of boosting its income. At the end of 2010 it launched Guardian Masterclasses, offering courses ranging from songwriting with one of Adele’s co-writers (two days, £500) to photographing London at dawn (six weeks, £750) to “How to finish a work of fiction” with the author Gillian Slovo (nine months, £7,000). Seven thousand! The Guardian, never a fan of the private schools, seems to have quietly joined their ranks.

“We’re not living in a world in which our revenues are going to come from cover price and advertising,” Rusbridger argues. “Where can you take the brand? You’ll have myriad small sources of revenue.” Hence the Open Weekend, an idea borrowed from Libération, which holds festivals in several French cities. “The Masterclasses are fascinating, and within a year, it’s a million-and-a-half business within the paper. It’s not very different from Pearson [owner of the FT, and half-owner of The Economist] having education. The notion of what the Guardian is is changing so far beyond a newspaper.”

The central problem remains: younger people seldom buy a paper—on the London tube in the morning, the free McPaper the Metro wins hands down. And the bigger and better Guardian.co.uk is, the less incentive there is for anyone to hand over their £1.20. Some of the cash spent on the Three Little Pigs might have been better used to show them how much more rewarding the print version is: at the New York Times, it is said that the typical print reader spends half an hour with the paper, while the typical online visit lasts half a minute.

With all the money being lost, it feels as if some drastic change must be coming in the British quality market. If the Guardian is determined to stay free online, wouldn’t it make sense to go free in print, as the London Evening Standard has done, with some success? “We’ve crunched every conceivable number and continue to do so,” Rusbridger says. “There are people upstairs with clever models. About five years ago we tried a version of the i [the Independent’s 20p mini-me, now outselling its parent] and we looked at 50p, 20p, free...” His tone makes it clear that the numbers didn’t add up.

The question hanging in the air is how long the print Guardian can last. “It depends how quickly Alan reacts,” Juan Señor says. “I suspect the Guardian will be a weekend paper soon. Online they will exist as they do now, hopefully charging, and they will focus their commercial energy on the weekend.”

Many guesses have been made as to when the last Western newspaper will roll off the last press. Some say 2043, others as soon as 2018. Rusbridger quotes his foe: “Murdoch said at Leveson it would be 20 years. I think we would agree that there will probably be a period when there will be fewer papers, beginning with Monday to Friday. Do we have an economic model built in which we keep testing the assumptions? Yes. And do we ask ourselves what would life be like with no newspaper? Yes. You don’t want to be in the position, in eight to ten years’ time, of going ‘oh shit, we didn’t think about that.’”

When he’s not editing, tweeting, launching websites, supervising investigations or defending open journalism, Rusbridger likes to play the piano. Every summer, he goes on a course. “In 2010 there was a bloke like me on the course who played this amazingly difficult piece which brings concert pianists out in night sweats, Chopin’s Ballade No 1 in G Minor. And I thought, if I played it for 20 minutes a day before I come to work, would I be able to do that?”

He kept a diary of the quest and turned it into a book, to be published in September. “When I signed the contract, I had no idea that this was going to be the year of Wikileaks and phone-hacking. So there’s some journalism sewn in. But it’s a book about amateurism, really. When I started I was 56, and I was also interested in what the middle-aged brain could memorise. I spoke to a couple of neuroscientists who said the brain was very plastic. In your mid-50s, you can learn new tricks.”

Tim de Lisleis editor of Intelligent Life and rock critic of the Mail on Sunday